Here is the article I mentioned. (Personally, I like the part where he exonerates Tom and lays part of the blame on the employees, not the management.)
ottawacitizen.com
The Ottawa Citizen
Tuesday 26 August 1997
What really sank the Gandalf Ship
Former exec says restructuring overwhelmed 'morale, efficiency'
James Bagnall
The Ottawa Citizen
When Mick Chawner left a secure job at Newbridge Networks Corp. in early 1996 to take over as chief technology officer at Gandalf Technologies Inc., some of his colleagues shook their heads in sympathy.
Gandalf, which recently sold most of its technology and assets to Mitel Corp., was a company with a troubled history.
It was also a long shot to match Newbridge's growth prospects.
But the move looks dumb only in hindsight. At the time, Gandalf appeared to be successfully transforming itself into a successful niche player in the world of remote-access technology.
And Mr. Chawner makes no apologies for changing employers.
"I went into Gandalf thinking the remote-access business was really going to move. And it did.
"It's potentially a $12-billion business. Gandalf had the right products and it ought to have done well," Mr. Chawner said yesterday in his first public interview since leaving Gandalf last month.
Mr. Chawner, now chief operating officer of Nepean-based iMPath Networks Inc., said a lot of the blame for Gandalf's downfall has been improperly laid at the feet of the firm's former chief executive, Tom Vassiliades.
"Tom was a very experienced, very bright individual. But the problems we ran into in restructuring to meet the market opportunity were simply overwhelming.
"Shifting from a direct to indirect sales team was only one problem. Had it been our only one, Gandalf would have done well," said Mr. Chawner.
The other difficulties, he said, had more to do with morale.
"When you collapse the organization from 1,000 employees to 500, something happens to the people. They lose their willingness to take risk, their willingness to take on more responsibility. These were hard-working, very bright people. There wasn't a shortage of people prepared to put the hours in.
"But no matter how hard you work, you find that a lot of the people you've built a relationship with over 10 years are suddenly no longer there and you've got to find out who does that role.
"That caused major problems in morale and in the efficiency of the organization."
Mr. Chawner also shed some interesting light on major issues facing Gandalf as long ago as 1994, when Mr. Vassiliades first took over a very ailing company.
"After I was there three months, I said to Tom, 'Why did you do this? Why didn't you just take Gandalf into (bankruptcy) protection and take out the good (technology). You could have got some more funding and created a new company,' " asked Mr. Chawner.
Mr. Vassiliades' answer, according to Mr. Chawner: "You're probably right, Mick, we should have. But the train has left the station. This is it."
Mr. Chawner disagrees with the assessment by analysts who have recently suggested Gandalf should have raised new equity in 1995 when its share price was more than $20.
"When people look at Gandalf, they neglect to see the rise from the ashes. We were doing quite well at that time, sales were growing," he said.
"The fact is, we didn't need the money. Cash was coming in and we had $10 million in the bank.
"Besides, the company was grossly oversubscribed. It had 40 million shares out there. It wouldn't have been an astute move to (do another share issue)," said Mr. Chawner. |
